Major stake of Flipkart sold to Walmart

Virginia Carson
May 11, 2018

Walmart India CEO Krish Iyer is likely to be the part of integration team from Walmart that will work on the transition of management. Although Flipkart is now the market leader, Amazon's Indian site, which only launched in 2013, is catching up quickly.

Nowhere in the world, Walmart has a market place model, " Mr Mahajan said in a letter written to the Prime Minister.

Walmart and Tencent are connected via more than just Flipkart.

According to the report in Times of India, among those turning dollar millionaires might be Sameer Nigam, CEO and founder of PhonePe, the payment arm of Flipkart, Amod Malviya, former chief technology officer, Sujeet Kumar, former president of operations, Vaibform Udaan.

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Flipkart's stock options are granted over a four-year period, with employees allowed to vest them every month after a one-year threshold.

What does the deal mean for Walmart? Amazon has been selling grocery in India for the past one year, while Flipkart has not rolled out this category.

Despite its size and global clout, Walmart has found it necessary to forge alliances in its battle against Amazon, which previous year bought Whole Foods Market to gain a foothold in the U.S. The deal has changed the retail landscape in the country as the world's biggest offline retail company has acquired India's biggest online retailer. Forrester expects the online retail market in India to reach $73 bn by 2022 from $20 bn in 2017.

USA e-tail giant Amazon has infused fresh capital to the tune of Rs 2,600 crore into its India unit, Amazon Seller Services, to strengthen the war-chest of the company against domestic rival Flipkart. Moreover, from Amazon's perspective, its domination as the global online retailer has forced its biggest American rival, Walmart, to fork out $16 billion for what is easily one of the most expensive acquisitions ever-a clear acknowledgement that Walmart is trying hard to make up for lost time by not investing more aggressively on e-commerce earlier. After working for e-commerce giant Amazon, the two friends set up Flipkart.

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"Even so, the company would retain clear majority ownership", Walmart said. Walmart will be supporting Flipkart to transform into a major public listed company in the country. "And it fits right in with our strategy", Judith McKenna, Walmart's worldwide chief executive officer, said in a phone interview.

"This may seem like a one-off acquisition in a faraway land, but Indian e-commerce is without a doubt going to be a focus for Walmart. The sale of ASDA in the United Kingdom also meant that Walmart needed to identify a new growth avenue - and long frustrated by the byzantine laws governing foreign investment in Indian retail, growing via bricks and mortar retail would have been too complex and slow".

"I believe it (the deal) will create a rumble in the industry". In key markets like the US, Walmart has show a particular capacity for maximizing this channel.

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